iTunes Europe - 1.29 Euros?

[thajeztah]

Prices in the Netherlands

NYC combined sales tax is 8.25%.

What are average album prices in the EU?

In the Netherlands, prices are pretty high. The largest record store charges you €21.99 for popular cd's! That's $26.23!

 

[AlanAudio]

The best clue that Apple isn't intentionally overcharging in Europe is that they don't appear to be running iTMS as a profit center. From what I've read, I think Apple's goal is to sell iPods, that iTMS is their way of doing that, and that they wouldn't choose to cut into iPod sales by padding iTMS prices.

Apple aren't saying anything about European iTMS prices, so it's all speculation ( with some very dubious calculations ), but Apple have already announced a considerably higher price for iPod mini when it appears in Europe.

So the line about not intentionally overcharging does seem to collapse.

Apple constantly claim that th business model for iTMS is to power sales of iPods, but charging a price per track for iTMS which exceeds that of buying the physical CD by mail order, isn't going to do much to boost the sales of inflated price iPods.

I dare say they'll make money, but they won't be making too many friends.

 

[chabig]

Apple constantly claim that th business model for iTMS is to power sales of iPods, but charging a price per track for iTMS which exceeds that of buying the physical CD by mail order, isn't going to do much to boost the sales of inflated price iPods.

Yeah, but who compares price per track when buying a CD? I think most people buy music based on price, not price per track.

 

[singletrack]

HAA HA!

You can get new release CDs from Play.com sent quicker than it would take to download 60 minutes of AAC over 56k, and you'd only have to pay around £8.25 for the privilege (cheaper again for less recent music) that's including airmail post and packing.

Why would I bother to use iTunes unless I can pay less for less quality?

Also, if it's priced for a euro only transaction, I won't be buying even if the price is right.

And you can, although it's illegal strictly, rip the CD into iTunes and then sell the CD for 4-5 quid. Then again ripping the CD and keeping it on a shelf is illegal in the UK also.

I still don't see how online music can be worthwhile until it's cheaper than £5 an album or say 50p per track. It's lower quality and you don't get to build that impressive shelf stack.

 

[Doctor Q]

Apple have already announced a considerably higher price for iPod mini when it appears in Europe. So the line about not intentionally overcharging does seem to collapse.

That doesn't quite disprove my speculation that Apple is not trying to make more profit on iTMS in Europe than on iTMS in the U.S. Charging more for iPods in Europe than iPods in the U.S. could have two reasons: highest costs in Europe, or the expectation that they can make more money because the market will bear a higher iPod price. I'd believe both, even if iTMS Europe is not a cash cow.

 

[guifa]

I don't know about anybody else, but I don't get charged any tax on the iTMS store, but Minnesota tax is 6.5% so who knows.

I get charged 7.5% because my card is from Auburn, AL. Which also means it's far better for me to buy songs in pairs then with an odd one out, because they always round up

Why do they call it value added tax anyway? I don't see any additional value added in paying tax, it would be more valuable for me to buy products tax free.

It's a tax added to the value (price) of a product. We have VAT in the US, although you probably don't know about it. For example, cell phones in Alabama have a VAT, although I forget the exact rate. Gasoline everywhere has a VAT: it's higher in California, hence they pay $2+/gal. whilst over in Georgia they still pay $1.70-/gal. Tobacco and alcohol products also have them. Say that the going rate for a cart of cigarettes is $1.00 (I have no idea the pricing, I don't smoke, as I'm only 18, and too young to buy tobacco products, not that I would if I could). The state levies a 50% tax on the cigarettes. It's done in a VAT style, so when you go to the store, you actually see it priced as $1.50, then when you go to buy it, you pay $1.64 (9% sales tax in Tuscaloosa, AL, where I'm at now). Sales tax is added at purchasing, rather than before purchasing like VAT.

 

[Krizoitz]

Ahem

GET A GRIP

Honestly all this b****ing and moaning is absolutely ridiculous. Do people choose not to read, or do they just enjoy looking ignorant.

First, this is a RUMOR. We have no idea what the real price is going to be.
Second, even if it is the real price it includes taxes and license fees. These are costs that the record labels have negotiated with the various governments. Apple can't change them.

I really think that way too many people on this forum will NEVER be happy.

Apple could introduce a quad processor G6 power mac tommorow for $50 and start selling iTunes songs for a DIME and people would still complain about something. Seriously.

1. Apple HAS to pay the record companies
2. Apple HAS to pay the government
3. Apple HAS to pay for the hardware
4. Apple HAS to pay for the internet connections
5. Apple HAS to pay employees to run the service

It costs money to do buisness. In addition they'd like to earn a little profit so they can continue to pay for future development and expand their markets.

It amazes me the ridiculous attitude that people have about Apple.

OMG they are charging me $50 for a new version of iLife that I was never promised for free and don't HAVE to have.

OMG they are charging $120 for an OS upgrade that I don't have to install and my computer will still run just fine.

OMG they are charging me $0.99 for a song that I don't HAVE to have.

You think money just grows on trees? Apple isn't a charity, they have to PAY for things to. So they SELL things at pretty dang reasonable prices too. I'm convinced some of you expect things for free. And people wonder why every thinks American's are lazy.

 

[Doctor Q]

Say that the going rate for a cart of cigarettes is $1.00 ... The state levies a 50% tax on the cigarettes. It's done in a VAT style, so when you go to the store, you actually see it priced as $1.50, then when you go to buy it, you pay $1.64 (9% sales tax in Tuscaloosa, AL, where I'm at now). Sales tax is added at purchasing, rather than before purchasing like VAT.

If your example is right, you pay sales tax on the VAT, i.e., tax on your tax. Otherwise the final price would be $1.59. Is that true? Would you really pay $1 x (1+50%) x (1+9%) = $1.64 instead of $1 x 1+(50%+9%) = $1.59?

 

[Hattig]

1. Apple HAS to pay the record companies
2. Apple HAS to pay the government
3. Apple HAS to pay for the hardware
4. Apple HAS to pay for the internet connections
5. Apple HAS to pay employees to run the service

1. Why are the record companies charging .80€ per track over here, and .66$ in the US? That is just wrong, an example of regional price fixing which the EU is starting to get interested in.

2. Yeah, if you had read the thread you would have seen that most posts took this into account. Lets do it for the UK. .99$ == 56p -> 66p inc. VAT.
1.29 EUR = 0.865691 GBP -- that is an extra 20p (35 cents) per track.

3,4. I wouldn't be surprised if it will use the same download sites as for the current iTunes. Anyway, they had to do it for the US iTunes, so there is no point here

5. And the same in the US.

OTOH, 87p for a music track isn't that bad. A good price I think would be 75p or 79p. Great for when I want to get a song I've heard but don't want to get the whole CD. It means I could reliably get the newest songs for a party for a reasonable price without having to buy 20 singles for £60+.

 

[guifa]

If your example is right, you pay sales tax on the VAT, i.e., tax on your tax. Otherwise the final price would be $1.59. Is that true? Would you really pay $1 x (1+50%) x (1+9%) = $1.64 instead of $1 x 1+(50%+9%) = $1.59?

Eh, with cigarettes I dunno. I know with gas, all taxes are included in the price given, sales as well. My guess that, yes, the ultimate price should en up at $1.59 thus the posted price would be ~ $1.45, so you pay $1.59. But knowing our f***ed up economics system here in Alabama, you probably do get taxed on your taxes (we tax familes of four on their income if they earn less than $12k a year. If it's not property, and we can tax it, we tax it as much as we can. So why not tax tax? It makes Alabama-sense)

 

[Krizoitz]

1. Why are the record companies charging .80€ per track over here, and .66$ in the US? That is just wrong, an example of regional price fixing which the EU is starting to get interested in.

Because they are competing with domestic music? These companies have to make deals with local distrubution companies and local record labels so that adds overhead. There are other buisness related costs as well I'm sure. Simply put it costs money to sell things, ANYTHING over seas because of laws to protect domestic companies. Digital distribution does lower costs, but it doesn't eliminate them yet.

3,4. I wouldn't be surprised if it will use the same download sites as for the current iTunes. Anyway, they had to do it for the US iTunes, so there is no point here

They can't just use the same sites for a couple of reasons. First distance slows down downloads. Second you have a whole bunch more people, i mean millions of more potential users, the servers need to be expanded to handle that. So it makes the most sense economically to put those new servers in Europe, which means hiring local people.

 

[groovebuster]

Most CD's I bought from Germany cost me around $25-30 US back in the late 90's. I can imagine those prices are even higher now with the current exchange rate.

Planet Earth to ITR 81... maybe CDs are expensive here, but not that expensive. In the late 90's the dollar exchange rate was comparable to now and even with sales tax included you would never get a price like that.

Stop inventing numbers! The prices for CDs in the late 90's in Germany were between 25-32 DM(!!!!!) and not US$! Including sales tax! Double CDs were around 35-45 DM.

1998 the exchange rate was 1$ = 1.54DM. So a normal CD would have cost you around 21$ at max. 30$ would have been more than 45DM. I never ever saw a CD that expenisve! Not back then and also not now!

And by the way... you can claim back the sales tax, if you are buying from outside the EU.

Have a nice day.

groovebuster

 

[Windowlicker]

I know I'm not buying 'em for €1.29 a piece, I would accept €0.99, though
/ filipp

yeah well I was expecting €0.99.. that would've been fair enough and actually a decent price. I think 10€ for an album is a fair price, but 15€ starts to be too much. I really really wish this 1.29 didn't come reality… there's some nice albums I'd like..

 

[Krizoitz]

yeah well I was expecting €0.99.. that would've been fair enough and actually a decent price. I think 10€ for an album is a fair price, but 15€ starts to be too much. I really really wish this 1.29 didn't come reality… there's some nice albums I'd like..

Ok, so Apple has to pay the record labels €0.80 leaving them €0.19 to pay for costs and any profit. RIGHT.

 

[JFreak]

Ok, so Apple has to pay the record labels €0.80 leaving them €0.19 to pay for costs and any profit. RIGHT.

the problem is exactly the 0.80 eur that apple supposedly has to pay for record companies. those greedy pigs! they are fine with 0.66usd they are having right now, so i can't see why they wouldn't be happy with the same amount of money in europe. i mean, currently 0.66usd equals 0.55eur.

what's the reason behind this supposed 0.25eur price increase the record labels are supposedly trying to get? it's effectively +45% before tax, so if the final official price becomes too high, this is the reason.

(if everyone played fair, the itms europe price would be calculated like this: take 0.99usd price and convert it into 0.825eur, then add an average vat of 20% and charge 0.99eur per song. that price would make me happy.)

 

[groovebuster]

Because they are competing with domestic music? These companies have to make deals with local distrubution companies and local record labels so that adds overhead. There are other buisness related costs as well I'm sure. Simply put it costs money to sell things, ANYTHING over seas because of laws to protect domestic companies. Digital distribution does lower costs, but it doesn't eliminate them yet.

So you are an expert for the european music business? Last time I checked, the major labels were global players, even though they have their local branches. And you forget that there are already music services on the internet in europe, selling songs for 0.99€. The problem is, that most of the services are Windows only. With a price of 1.29€ the iTMS won't be able to compete, no matter if VAT is included or not. That's all what people are saying. They won't buy, because in most cases it would be too expensive! Period. I wonder why you are making it a personal crusade to defend Apple? If they can't sell songs for 99 cents, they will fail...

And by the way... it wouldn't be the first time that Apple charges way more for their products, just because they are sold in Europe. Tell me one time in history, when the exchange rate was in benefit for the european customers? Apple always charges at least 15% more for their products over here, without sales tax. No matter how the exchange rate was. People are very suspicious these days about the pricing of Apple.

They can't just use the same sites for a couple of reasons. First distance slows down downloads. Second you have a whole bunch more people, i mean millions of more potential users, the servers need to be expanded to handle that. So it makes the most sense economically to put those new servers in Europe, which means hiring local people.

1) Distance doesn't really matter anymore these days. You don't really think that a couple of million downloads per month would slow down the transatlantic backbones we have these days? Especially with the overcapacity we are facing?

2) One big server farm makes way more sense than having many little ones regarding the support and service costs. All big companies are hosting their download servers at one place. I stand corrected, if Apple chooses to decentralize the distribution of the iTMS songs. But especially from a pure economical point of view it wouldn't make sense. Could be that the servers have to be located in Europe when they want to make business here.

3) Why renting servers in Europe and hiring local staff would be necesseraly more expensive than in the US? Should cost the same overall, so what was your point?

Ok, so Apple has to pay the record labels €0.80 leaving them €0.19 to pay for costs and any profit. RIGHT.

Why so aggressive? Nobody said that. But if they are charging 1.29€ per song, the iTMS in Europe will fail. It doesn't matter in the end if it is Apple's fault or not. Maybe the MI even wants Apple to fail, because they are afraid of Apple becoming THE major player for worldwide music distribution, telling the MI in the end what they can charge for a song and not the other way around, just like it happens to many food manufacturers when negotiating with the big chains like Wal-Mart.

I think Apple better should admit defeat in this case instead of screwing around with their customers...

groovebuster

 

[SemperMac]

Tax (VAT) in Europe

So many of you in this thread have had comments on Europan taxes (VAT = Value Added Tax) and so many of you have been wrong about levels in different countries...

Here your find the correct details (please click the flag for the country of your interest): http://www.nikosax.com/sw355.asp

 

[JFreak]

apple most likely will not need new servers. think about the time difference - when the americans buy the most, the europeans are sleeping, and when the europeans buy the most, the americans are sleeping. it's just more efficient for apple server farm to have constant download rate instead of a huge peak for 12 hours and then another 12 hours of idlling.

if they need to boost their server farm a little, it's no biggie. most probably they wouldn't have to do anything for their hardware.

 

[dekator]

If your example is right, you pay sales tax on the VAT, i.e., tax on your tax. Otherwise the final price would be $1.59. Is that true? Would you really pay $1 x (1+50%) x (1+9%) = $1.64 instead of $1 x 1+(50%+9%) = $1.59?

With some goods, e.g. tobacco and oil it's true (at least in Germany) you pay a special tax + VAT.

As for the iTMS pricing: We'll have to see how that works out. One thing is sure, I'd never buy a song that costs me more than in the US. I'm tired of being ripped off. All this talk about 'labels, government' blah, blah, blah wanting more money is just plain bovine excrement. Prices are *made* by the labels. It's Apple's job to negotiate. That's all. The *only* difference between the US and Europe is VAT. That's 16% in Germany.
BTW, thanks for the nice advice (you know from who) that we don't have to buy the songs. Well, the whole point (for me, as I'm not going to buy DRMed songs anyway) is that I wish that the iTMS succeed, that Apple succeeds. The price situation in Europe (and I understand also in Australia/NZ) is dismal and Apple are only hurting themselves. That's sad.
I hope the occasional Mr. Evident is able to understand that this is not just about personal finance but about the success of a brand which we happen to like... although Apple clearly doesn't really care.

 

[stuartea]

Cheap as chips

Seems like a good deal. According to http://www.currency-converter.co.uk/ that works out at 66p (UK £0.66) and I'd thought it would've been 99p a track.

Who knows what it will be when it really launches but I'd be happy to pay 66p.

Getting into the comparing it to US prices is pointless. The pound won't be that strong foverever (I just wish we'd dump the £ all together. That's personal opinion so please save the flag waving & 'I was born here so it must be great' messages)

 

[dekator]

They can't just use the same sites for a couple of reasons. First distance slows down downloads. Second you have a whole bunch more people, i mean millions of more potential users, the servers need to be expanded to handle that. So it makes the most sense economically to put those new servers in Europe, which means hiring local people.

As groovemaster already said, I don't think that's true. I get the same speed as ppl in the US when e.g. watching video from Apple's QT site etc.. The real question is how broad your connection is, distance hardly makes a difference. Especially not between Europe and the US.

 

[dekator]

Seems like a good deal. According to http://www.currency-converter.co.uk/ that works out at 66p (UK £0.66) and I'd thought it would've been 99p a track.

Who knows what it will be when it really launches but I'd be happy to pay 66p.

Uh, €1.29 is more like £0.86 isn't it ? €1 = £o.67 currently right? (At least that's what Apple's calculator says...

 

[JFreak]

Uh, €1.29 is more like £0.86 isn't it ? €1 = £o.67 currently right? (At least that's what Apple's calculator says...

yes, according to the national bank of finland, one euro currently equals 0.67 british pounds, so 1.29eur = 86p

 

[CmdrLaForge]

Based on what I've read here, and correct me if I'm wrong, the increase in price is due to taxes (VAT, etc.) and the licensing fees/percentage. So why are some people putting the blame on Apple? I wouldn't be surprised if their equivalent of the RIAA is trying to milk the iTMS-Europe for what they can. But I seriously doubt Apple's margins are any greater than what they have here in the States. I'm sure Apple would like to have the prices as low as possible, too.

Yes - I guess you are right. Its not Apple vault, but I am a customer. And I am buying from a company. I don't care what there deals behind are. I don't care where they procure things from and how much they have to pay for it. Its a customer - Apple relationship and I don't care about anythings thats going on behind the scenes.

In the end - I purchase a song for Eur 1.29. We will see if this is a good deal for a lot of people here in Europe or not. If it is - fine for Apple. If not ...

 

[johngordon]

got to say that i would have just expected it to be 99p here in the uk - so 85p isn't too bad.

its a very price sensitive thing tho' - depending on how much and how readily you can pick up a cd for will affect whether or not i'd buy an album off ITMS. if i can get a cd for £10, then its hardly worth paying £8.50. (although under £8 would just about clinch it i think - so 12 euros, not 13.

if however a cd is £13-16, then £8.50 from ITMS isn't so bad.

also - for single songs 85p is pretty good, rather than £3-£4 for a cd single. (although you don't get the b-sides, but half the time there's a good reason they're b-sides)

so i think ultimately i'll end up buying some cds, and buying some stuff off ITMS, depending on price, and depending on how much i like the band / album enough to make me want the sleevenotes / physical cd.

good news if it does come as soon as June.

with improvements to our digital cable just around the corner, my ipod arriving next week, and this to go along with the powerbook and the ixus digital camera, my didgital lifestyle will be complete.

Iain